Key Takeaways
What's the Difference Between Microsoft 365 and Office 365?
If your business uses Microsoft Word, Outlook, Excel, or Teams, you’re already familiar with Office 365. But there’s another tier—Microsoft 365 Business Premium—that’s gaining traction, especially with small and mid-sized organizations that prioritize security, compliance, and remote management.
The names can be confusing, but the differences are significant. Microsoft offers a range of business plans designed to address specific business needs, such as enhanced security, device management, and advanced collaboration tools. The functionality of each plan varies, with higher-tier options providing more comprehensive features and capabilities. Choosing the right plan isn’t just about saving money—it’s about protecting your data, supporting hybrid work, and avoiding operational headaches.
It’s also worth noting that Microsoft no longer sells Office 365 Business Premium—or any of the legacy Office 365-branded licenses. These plans have been phased out in favor of the Microsoft 365 bundles (Business Premium, E3, E5), which offer significantly more built-in security and compliance features. While many organizations still operate on the older Office 365 licenses due to legacy agreements, this often means they’re missing out on essential protections. In today’s threat landscape, clinging to outdated licensing isn’t just a technical limitation—it’s a security risk. Upgrading to Microsoft 365 isn’t about having the latest tools; it’s about staying protected with modern, integrated cybersecurity.
Office 365: Tried and True Productivity
Legacy Office 365 licensing included the core apps many businesses rely on every day:
- Outlook (email and calendar)
- Word, Excel, PowerPoint
- OneDrive (1 TB cloud storage)
- Microsoft Teams (chat and video collaboration)
- SharePoint (document sharing and intranet tools)
- Forms (for surveys and data collection)
- Office 365 also provides web versions of its core apps, allowing users to work directly from their browsers.
Office 365 was great for businesses that need modern productivity tools without advanced security or device management features. But in today’s world—where phishing, ransomware, and remote work are the norm—many organizations find that the legacy Office 365 bundles alone don’t provide the security tools needed to protect the organization.
Microsoft 365 Business Premium: All That, Plus Security
Microsoft 365 Business Premium includes everything in Office 365, plus advanced security and compliance features that are not available in Office 365, increasing the availability of enterprise-grade protections:
- Microsoft Defender for Business – enterprise-grade antivirus and threat protection
- Intune – mobile device and app management for laptops, phones, tablets, and other mobile devices
- Entra ID Premium (previously Azure AD Premium) – advanced identity and access management with conditional access
- Data Loss Prevention and email encryption
- BitLocker enforcement for disk encryption
- Automated patch management to reduce vulnerabilities
Business Premium includes advanced tools to protect sensitive data, such as permissions and access controls.
For industries like legal, healthcare, and financial services—where compliance and client confidentiality are critical—Business Premium helps check security boxes without needing costly third-party tools. Microsoft Purview is included in Business Premium to provide comprehensive data governance and compliance solutions.
PSM often recommends Business Premium for organizations that want to strengthen their cybersecurity posture without complicating IT management. Our team handles deployment, configuration, and user onboarding—so you get the benefits without the stress.
Use Case:
- Office 365 may give your team the tools to collaborate on documents and emails, and may be sufficient for some specific business types focused primarily on collaboration.
- But Microsoft 365 Business Premium ensures that sensitive files are encrypted, devices can be wiped if lost, and access can be controlled based on user roles or location.
That added protection is essential in regulated industries, especially with remote and hybrid workers accessing data from multiple devices and locations. Meeting the needs of customers and clients is a key reason why organizations in regulated industries choose Business Premium.
Comparing the Two Plans Side by Side
Feature
Office 365 Business Standard
Microsoft 365 Business Premium
Word, Excel, PowerPoint, Outlook Microsoft Teams & OneDrive
Email hosting (50 GB mailbox)
Advanced threat protection
Device management (Intune)
Data Loss Prevention
BitLocker & Remote Wipe
Entra ID Premium (Conditional Access)
Licensing for each plan determines which features are available to your organization. It’s important to review the licensing terms for each Microsoft 365 plan to ensure you select the right option for your business needs.
Cost and Budget: What Should You Expect to Pay?
When planning your move to Microsoft 365 Business, understanding the cost structure is key. Pricing varies based on the plan you choose and the number of users in your organization:
- Microsoft 365 Business Basic is the most budget-friendly, offering essential productivity apps (web and mobile only), Teams, and cloud storage at $6.00/user/month (annual commitment).
- Microsoft 365 Business Standard provides more robust features, including desktop versions of Office apps, for $12.50/user/month.
- Microsoft 365 Business Premium includes all features of Business Standard plus advanced security and device management capabilities for $22.00/user/month.
One important caveat to keep in mind: Microsoft 365 Business licenses come with a 300-user cap. While this limit typically doesn’t affect smaller organizations, those nearing 250+ users should start planning ahead. Once you hit the 300-license threshold, any additional users must be assigned an enterprise-level license such as Microsoft 365 E3 or E5. This can impact budgeting and deployment, so it’s smart to factor growth into your licensing strategy early on.
You’ll also want to consider the level of support your business might require, especially if you’re operating in a regulated industry or handling sensitive data.
Ultimately, the best plan for your business depends on your size, security needs, and how many employees need access to productivity tools and secure cloud storage. Aligning your budget with your operational priorities ensures you’re getting the best value from your Microsoft 365 investment.
Why Mid-Sized Businesses Are Upgrading
According to a recent Microsoft report, over 70% of security breaches originate from compromised endpoints or user credentials. Microsoft 365 Business Premium is designed to address those weak spots—without requiring a large IT team.
With built-in protection and centralized management, it’s a smart move for:
- Law firms managing confidential client documents
- Healthcare practices working under HIPAA
- Financial firms needing layered authentication and encryption
- Nonprofits managing dispersed teams and volunteers
Why Chicago Businesses Choose Business Premium—With Local Support
- Mid-sized organizations in Chicago face a unique blend of challenges: a competitive talent market, strict compliance needs, and the growing demands of hybrid work. Whether you’re a Loop-based law firm, a healthcare clinic in the West Loop, or a nonprofit on the North Side, having the right Microsoft 365 plan—and a local IT partner—can make all the difference.
- At PSM, we support organizations across the Chicagoland area with:
- On-site support when needed, including in-person device setups and security audits
- 24/7 helpdesk staffed by real people, not overseas call centers
- Deep experience with Illinois-specific compliance, including data privacy laws and industry regulations
- Strategic IT guidance that aligns with Chicago’s fast-paced, service-driven business environment
- “We help clients not only choose the right Microsoft 365 plan—but make the most of it, with secure rollouts, end-user training, and ongoing support—all right here in Chicago.”
- For growing organizations in our city, Microsoft 365 Business Premium isn’t just a software upgrade—it’s a strategic investment in secure, modern operations.
Conclusion and Recommendation: Which Plan Fits Your Business Best?
Choosing the right Microsoft 365 Business plan comes down to understanding your organization’s unique needs. If you’re a small team with basic requirements, Microsoft 365 Business Basic offers essential tools for communication and collaboration at an affordable price. For medium-sized businesses seeking more advanced features, Microsoft 365 Business Standard provides the full suite of desktop apps, enhanced collaboration, and workflow automation.
For organizations that prioritize security, access management, and compliance—especially those in regulated industries—Microsoft 365 Business Premium is the top choice. It combines all the productivity features of the other plans with advanced protection for your data, devices, and users.
By carefully evaluating your business’s size, workflow, and security requirements, you can select the Microsoft 365 plan that best supports your goals. Remember, Microsoft 365 for business not only boosts productivity and collaboration but also empowers your team to discover new efficiencies and stay ahead in a competitive market. The right plan is more than just software—it’s a foundation for your business’s growth and success.
Need Help Choosing or Migrating?
Whether you’re currently using Office 365 or starting from scratch, PSM can help you assess your needs and implement the right solution. Let’s talk about your Microsoft 365 strategy.
Contact us today to schedule a free consultation.
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Kayley O'Connell
Kayley O’Connell is a seasoned marketing leader with a passion for connecting people with the right technology solutions. As Senior Marketing Manager at PSM Partners, she drives brand strategy, demand generation, and go-to-market execution across IT services, cloud, security, and staffing. Kayley built PSM’s marketing engine from the ground up and continues to scale its impact through data-driven campaigns, creative storytelling, and strong cross-functional alignment.